New York—Sales and Use Tax: Real Estate Consulting Services Not Taxable

A taxpayer's real estate consulting services are not subject to New York state or local sales or use taxes. Generally, consulting services are not among the enumerated services subject to tax under Tax Law §1105 or §1110. Many of the taxpayer's activities, for which he charges his clients, include collecting, compiling, and analyzing information and providing reports to his clients. Although tax may be imposed on the sale of information services, including collecting, compiling or analyzing information and furnishing reports to other persons, to be taxable the information must be written or in a form that can be reproduced in any manner. Excluded from sales and use taxes are information services that are personal or individual in nature and that are not or cannot be included in reports furnished to anyone other than the purchaser of the service. The taxpayer asserts that he does not prepare any written report, does not provide information developed for a client to any other person, and gives advice to clients based on information that he gathers looking at real estate or based on evaluations made after consulting clients' tenants and on-site property managers. Thus, to the extent that any of the components of the taxpayer's services constitute an information service, the taxpayer's charge for that component would be excluded from sales and use taxes.